Dame Angela Eagle
MP for Wallasey · Labour · United Kingdom
“The Kremlin increasingly relies on proxy organisations to pursue its objectives, seeking to undermine our security while maintaining a degree of plausible deniability. The so-called GRU Volunteer Corps is a clear example of that approach. It is not an independent force or a loose collection of volunteers.”
“This Government have introduced support for the Jewish communities who have been threatened and directly targeted by IRGC proxies. Just a couple of days ago, my right hon. Friend the Prime Minister announced an extra £250 million for policing to ensure that we can support and protect our Jewish communities.”
“I will move on to the Islamic Movement of Companions of the Right. The IMCR has publicly claimed seven attacks at UK locations linked to Jewish and Israeli communities and to Persian-language media, including the antisemitic arson attack on four Hatzola ambulances in Golders Green on 23 March.”
“We expect platforms to act responsibly and not to provide space for state threat-linked activity, propaganda or recruitment. We will be keeping a close eye on that, as well as liaising with social media companies to tell them about how this law impacts them.”
“The IRGC Quds Force and the IRGC Intelligence Organisation, together with the Ministry of Intelligence and Security, form the Iranian intelligence apparatus. As a key component of the Iranian state’s security apparatus, the IRGC is answerable directly to Iran’s Supreme Leader.”
“It provides a targeted and proportionate means of disrupting those involved in foreign power threat activity based on the recommendations of Jonathan Hall KC, the independent reviewer of state threat legislation. To answer the hon.”
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Every one of 5,924 lines we hold for Dame Angela Eagle, in date order, each linked to its source. Free to read, in full, without an account. Page 40 of 119.
“The Government also need to show moral leadership: stop setting up VIP lanes for Tory donors and their mates and spending £18 billion of public procurement on this. The Government need to help the 3 million excluded people, who do not want to hear that £200 billion has been spent on the economy when they have not seen any of it and are in desperate need. The Government need to be honest and up front, and then they will get support.”
“The Government need to reward good behaviour, not punish bad, so they need to enable isolation by paying proper sick pay and supporting those who have to isolate. The £500 payments are not adequate, and they are running out in some areas of the country, with no guarantee that they will be increased. They are barely reaching one in eight of those who have to isolate. This gives people who cannot afford to self-isolate an incentive not to download the app, not to take the tests and to hope it will be okay. The Government need to work with the grain of public requirements, necessities and behaviour, not against it. The Government need to tell the truth, not keep the truth from us in this assessment we have had, which is full of weasel words.”
“There has been a lack of trust in the rules, not least because they keep being changed; there are eight different iterations of the furlough scheme. There is no certainty with Government support, because they cannot stop fiddling and changing it, sometimes within weeks of announcing it. That has caused uncertainty and cynicism, and it is hard not to come to the conclusion that in the Prime Minister we have the wrong person, in the wrong place, at the wrong time. This Government need to lead by example, so Dominic Cummings should have been sacked immediately for ignoring the lockdown rules, and that would avoided an awful lot of cynicism that came in the aftermath of that terrible decision.”
“In this pandemic, the Government have always been behind the curve—too slow to take the necessary decisions, too slow into lockdowns and not making the right decisions in a timely way—which has led to this terrible double whammy of one of the highest per capita death rates in the world and the largest recession in Europe. There seems to be no forward-looking strategy to get ahead of the virus and the kind of issues that we know from the modelling are going to come up. Inadequate support has been provided to those who need to be supported. Instead, we have heard vainglorious announcements about moonshots and world-beating systems, and then a failure to deliver on that kind of boosterist language; there has been hyperbole and not enough delivery.”
“That might be in all of the many consultations, which I confess I have not read, so it might be set out there. If the Minister could put a little more on the record, we might at least have some certainty there, not least for Pepper v . Hart purposes.”
“To ensure that markets are not distorted and the potential for nefarious profit by some with insider information is minimised, we need reassurance about how the FCA will perform the task, particularly in its interactions with the other regulators. I am not sure what the Government’s intention is, apart from saying they are going to liaise with other regulators. Is it the Government’s intention that these benchmarks ought to be similarly designed and defined across different regulatory jurisdictions, since this is almost a currency, or are we seeking divergence here as well in order to perhaps increase our chances of being the place where some of this business is written? Perhaps the Economic Secretary could reassure me on that, because the FCA’s powers are pretty strong, but what is the intention?”
“Obviously, this is a very technical area, to say the least. I just want to ask a couple of questions so that I can get my head round how the FCA will use the power. We have different regulators who could make different determinations as to what constitutes benchmarks going forward, and yet those benchmarks write contracts worth trillions of pounds and dollars into the future. Any arbitrage opportunity in the way that those contracts work could make some people very rich and ruin others. This will be decided as one goes along. Some of these contracts are being made, but some are already projected into the future.”
“In my time in this place, I have had many arguments with Ministers, and made many arguments as a Minister, about why we must not put particular words on the face of Bills and what their meaning is. Can the Minister enlighten us as to what he, the FCA and the Treasury mean by “robust” and how they are defining that in law, so that I can have a bit more confidence that they have got it right on the face of the Bill?”
“I anticipate that the answer will be, “Only when it is needed because of what is happening in the market.” If this kind of procedure is theoretical and on the face of a piece of legislation but hardly ever used, does that mean that the mechanisms that the Minister is setting out in clause 19 and other parts of the Bill will rust away? They will be there in theory, but there will be nobody there to work them properly. How does he anticipate that the market, the FCA and the benchmark administrators will maintain the capacity to do this if cessation is a very irregular, rare thing? Will the Minister spend a bit of time defining what “robust” means in this context?”
“Again, I have just a few questions so that I can get in my head precisely what the reason is for putting this in primary legislation. LIBOR clearly had its issues but it was used for a very long time. Is the Minister anticipating that benchmarks will change much more rapidly in the future, or does he want some kind of stability with the new benchmarks that are based on actual prices, rather than the guesses of participants in the market, as LIBOR came to be defined prior to its demise? Is the Minister expecting that this kind of provision for ceasing benchmarks will be used regularly?”
“Does the Economic Secretary think that, given the incredible trouble that the wind-down of LIBOR has caused in the markets—not least because of what is on the face of the Bill and the very difficult issues caused by having to exit the LIBOR benchmark—it is best to try to get the next benchmark sorted and future-proofed, so that it does not turn into LIBOR 2 and cause his future successor in the Treasury and me all this kerfuffle in a Public Bill Committee?”
“Will the Economic Secretary share with the Committee the intention behind the extension to 2025? He said that it was to create certainty—I can understand that. Is the intention to transition to something different—the new third-country regime—after the extension, or is it to develop and introduce it earlier if it looks like there are advantages to doing so? I know that I am asking him to gaze into the future, but this will be in the Treasury and regulators’ work list and they will presumably schedule it at some stage. Does he expect the creation of a third-country regime to be difficult or quite easy? Are the Government thinking of basing it on the existing regimes or diverging from what we are used to? Will he give us a little more information about how the Treasury intends to proceed with this piece of technical but very important work.”
“I recognise that I missed a lot of exciting things this morning, but I do not think the Minister is really moving on from that, as he now has to do the work to put it into effect.”
“Friend spent a little time raising some of the risks and I suppose they can be characterised by the view that in a very liquid and rapid global money market, if there are vulnerabilities or back doors into regimes that are interconnected, that causes risks. We saw some of those risks playing out during the global financial crisis. To what extent does the Minister believe that the Gibraltar regime for which the clauses legislate will be—I am going to use that word—robust enough to prevent the opening of back doors to vulnerabilities for all sorts of money that is sloshing round the world? My right hon. Friend mentioned some of that—money used for money laundering, drugs and terrorism. It is important that the defences that we have against coming under that kind of influence should be maintained and strengthened, rather than weakened.”
“I suppose I want the Minister to reassure me about the fact that financial markets are rapid and regulation—if there is an equivalence regime, or mini-single market as my right hon. Friend the Member for Wolverhampton South East put it—allows the Gibraltarian authorities to do the regulation and then have immediate access to the UK. That may be done in a way that gives us some benefit; perhaps the Minister will say what the benefits of the regime are, particularly for UK consumers, given that Gibraltar does 90% of its business with the UK anyway. Perhaps he will also say what the risks would be. My right hon.”
“What warning flags does this regime put up to ensure that if that dynamic begins to happen, we can close it down rapidly? Does the Bill expect some kind of relationship between the Gibraltarian regulators and the Treasury? How does the Minister expect that relationship to work out? Obviously, I do not want to spend all my time being so negative about these things, so will the Minister also say a little more about what the benefits might be? Will the Minister also talk about consumer protection in his response? Motor insurance is one of the largest components of the financial services that Gibraltar currently sells into the UK, and clearly there is a big retail consumer protection angle to such financial services.”
“I am not saying that our regime is perfect, if we are honest, and we will get on to that later in the Bill. My worry is that this might inadvertently create some vulnerabilities. I suppose what I am seeking from the Minister is some reassurance that the regulators have got a handle on this, that they will not allow the wish not to infantilise the Gibraltarian regulators to be a reason for not paying close attention to this, and that there will be some close supervision of what is happening, particularly once the regime is established. Once these things settle down, it is then that things start to happen. If a door is opened inadvertently somewhere, this money swilling around tends to find it, and then things can start changing very rapidly.”
“We clearly had some recent examples during the 2008 crash, where some robust enforcement had to take place with offshore island countries or territories that were trying to take money out of our jurisdiction in ways that were unacceptable at the time. There is therefore a financial stability issue, but there is surely something about consumer protection, fraud and money laundering here as well. Perhaps he could talk in more detail about what those narrow circumstances are. Our regulators will be reluctant to romp and stomp all over Gibraltarian institutions and their regulators. Yet, by definition, Gibraltar is a small territory, and it will have less capacity to deal with some of the sophisticated fraudsters and international terrorist, money-laundering types than we do here.”
“My hon. Friend gives an example of exactly the kind of point I was trying to make more generally about ensuring that these regimes are correct. Given that Gibraltar governs itself, the Bill makes it clear that Gibraltarian regulators will continue to do that job in Gibraltar and supervise the companies based there after this arrangement has been legislated for. That is quite proper in many ways, but it does give our regulators in a small number of narrowly-defined circumstances—I think this is the phrase—the duty or the right to leap in and do some regulation or enforcement presumably. Will the Minister say a bit more about that? He did mention it in passing in his introduction to the clause, in which he talked about financial stability.”
“Clearly, the potential situation is there now. In evidence, the response—reasonably—was that that has not happened to date, even though there have been close connections between Gibraltar and the UK. However, these things tend to be dynamic and, once the agreement with Gibraltar is established, our tax regimes may diverge even further. If the Chancellor has his way after yesterday’s statement, I suspect they might have to. Will that create more of a temptation for financial service companies to offshore to Gibraltar outside of the UK? Is the Minister convinced that that will not happen as a result of the Bill? I want reassurance from him about those potential weaknesses or risks and about consumer protections. He might even want to say a bit about benefits, if he feels up to it.”
“Is he convinced that this is the right regime to have in and around areas of perhaps rapid evolution?”
“Given that some of the areas caught by this part of the regulation were previously quite esoteric, but might not be so esoteric in the not-too-distant future—I am thinking of electronic money, which a few years ago would have been a tiny amount of transactions and is now very much larger—can the Minister reassure the Committee that, if the size and importance of these transactions grow, they are confined in the right area of the law for regulation? Does the Treasury have any views on how to take account of the changing importance and size of this area and to change the regulations around it in future? As we see, the pandemic has meant that many people who used to use cash no longer use it. Payment services and e-money are growing areas and could grow rapidly..”
“Is my right hon. Friend therefore surprised or unsurprised that the Office for Budget Responsibility documents yesterday said that the cost of the end of the transition period will be an economy that is permanently 2% smaller?”
“In this covid crisis, the Government have presided over an horrific double whammy of one of the largest per capita death rates in the world and the deepest recession in the G7, and that is before the Brexit disruption due at the end of the year. Is the Chancellor really proud of his record?”
“Once the nature of what had been going on during the financial crisis was laid bare—a lot of it had been going on under the radar—one of the surprises was the connection between investment companies and banks, particularly the investment arms of banks. We discovered their trading of derivatives and the leverage they got out of those derivatives to make more money for themselves, more commission and more remuneration. Actually, a lot of what was in those derivatives was not sighted, and the regulation had essentially involved taking on trust the rating agencies’ assessments of what those derivatives were worth, without looking inside the packages.”
“I am particularly interested in—I hope the Minister will explain it—how this will work, given that the Bill gives our regulators the power to change what has just been onshored to create a completely different system for investment firms, and then to take that forward in future regulation. We know that we have to be eternally vigilant to the way that companies evolve to respond to regulatory systems. If we end up fighting the previous battle, we will probably miss the next bubble. I would therefore appreciate it if the Minister—in commenting on the amendment, which is probing, in that sense—will explain how he believes that the regime that the Bill introduces will be able to respond to the challenges of the evolution of threats.”
“However, in the aftermath of the financial crisis, there was widespread recognition and agreement—not only in the Basel III and 3.1 regulatory negotiations and how those agreements were put into EU law, which we are talking about now—about what had gone wrong; about needing to identify systemically important companies and make sure they were regulated appropriately, given the risk that under-capitalisation posed to the economies of countries in which those organisations were based; and about having rigorous and intrusive regulation to avoid some of the mistakes and traps that were fallen into in the run-up to 2008.”
“It was certainly the case when I was a Minister, and I am sure it still is, that because of the relative size and importance of the financial services industry in the UK, our technocrats, if I can call them that, were always very involved in drawing up and agreeing the financial service directives that were in effect in the whole of the European Union. We used to have quite vigorous arguments with the European Union about the nature of some of that, given the slightly different culture that we have in the Anglo-Saxon world, if I can put it that way—the Minister knows what I mean—compared with some things that more routinely happen in the EU, and also because, frankly, our financial services sector is far larger than most financial services sectors within the EU and differs in its make-up. There were always these cultural issues.”
“Given that we are now onshoring all these directives, and that the Government have decided, before the transition period is even over, in anticipation of changes to the capital requirements regimes, to diverge from what was put into UK law as part of the withdrawal agreement, I think the Minister owes us—I am sure he will be prepared to do this—a detailed explanation of what the Government perceive to be the advantages of diverging from rules that we had such a crucial part in writing when we were in the European Union.”
“I repeat that is a pleasure to see you in the Chair today, Mr Davies—there will be a bit more of that as we make our way through the Bill. I support my right hon. Friend’s amendment, and want to tease out some of the Government’s intentions in this very technical Bill. We may not have known before 2008, but certainly know now, that highly technical things can be crashingly important if we do not keep a close eye on them.”
“The Minister wants to keep it in the regulators’ ambit, in which there is not so much light, to be honest. It is highly technical, and it is hard for those on the outside to have a look inside to see what the implications are. I have hardly had any correspondence from outsiders on the Bill to help me through the long hours and sittings to come. That rather illustrates my point: that a light needs to be shone on this area, because of the risks if we get it wrong. The Minister rightly wants to get it right, but surely it is relevant to hear from him and to have a bit of transparency, and to put something on the record now about how he sees the advantages playing out, as opposed to the risks. Will he have another go?”
“Therefore I wonder whether the Minister might be able to say a little more about the benefits of having the regime that he called right-sized regulation; why we might wish to move away from the current position so quickly after the transition period is over; and what he sees as the benefits of doing this. Refusing our amendment means that there will be no transparent analysis of the effect on the public domain, so we will not be able to discuss it. I for one think it is important to get these very technical, dry regulations out into the open and to translate them, with the seriousness they deserve, into the potential implications that they present for all our constituents. Our amendment seeks to do that by at least having a transparent publication of these kinds of analyses.”
“The Minister can stand there and say, “The regulators are going to right-size regulation.” That sounds like a fantastic thing because of the very phrase that the Minister has used—“right-size”—but how are they deciding? We clearly got the wrong size because of evolutionary behaviour to avoid regulation and increasingly risky behaviour in the global financial system in the run-up to the global financial crisis in 2008, which was caused by or began in the subprime mortgage market in America but which brought most of the—if I can put it this way—western-style banking systems close to ruin in the rest of the very interconnected economy because of what had been happening with derivatives.”
“I want to come back on that and press the Minister on a couple of questions that, with all due respect, I do not think he answered in his response. Clearly, our amendment is a hook on which to hang a debate about transparency, so that we know what the regulators are doing, and about accountability, because, as I said earlier, if these organisations begin to respond to particular inducements, such as their own remuneration, they can cause risk to happen in a way that can be severely detrimental to consumers and entire economies, as we have seen in recent history. I think that, in the light of that, we are perhaps owed a little more of an explanation from the Minister—I am putting this gently—about what the approach of the regulators will be.”
“Does my right hon. Friend agree that there is a fourth one, which is to say, “This should not be on the face of the Bill; we are going to do it, but we are going to put it in secondary legislation,” which of course is unamendable and usually rammed through this House in a way that makes scrutiny even harder?”
“Like the hon. Member for Glasgow Central, I am on the Treasury Committee. We have a very full programme. The hon. Member for Hertford and Stortford also shares the pleasures of being on the Treasury Committee. However, it would be very difficult for us to question the FCA with this level of granularity. Therefore, given the onshoring and the importance of this regime as it evolves, how does the Minister expect the transparency, oversight and accountability to be put in place going forward? Does he expect that to also include consumer authorities and the consumer interest, and will explain what he expects these companies to be able to do under this regime that they cannot do now?”
“Getting the right incentives for remuneration is a key driver for behaviour, and behaviour is a key driver for activities in that area, as we know only too well. If we did not know that from 2008, we would know it from the Wall Street crash in 1929. It is part of a set pattern. How will the Government ask the regulators to deal with that issue?”
“The clause inserts a new part 9C into the Financial Services and Markets Act 2000, which forms the legal basis for the new regime that the Bill introduces for investment companies. We have been talking about the minimum amount of capital required. We have covered some of that, although we will get further into it when we come to the Basel 3.1 bits. Will the Minister say a bit about remuneration policies? That is another issue that will be regulated. We know from what happened in the financial crash and the build-up to that bubble that remuneration policies formed a key part of the bad incentives that created the behaviour that caused the crash. How will the Government be dealing with the regulators about remuneration? What will the principles be?”
“I thank the Minister for his indulgence. Clause 2 is also partly about enforcing regulations; there are references to fraud and criminal offences, which again we will come to in more detail later. Will he let us know whether fraud enforcement will be beefed up? We can have a great regulatory regime and redefine fraudulent behaviour, but if enforcement is not up to scratch, that will not really deter. This is area where, if enforcement is too weak, the rewards are very high and the risk of being caught and prosecuted or fined is very low. Can he give some reassurance on that point at this stage?”
“Does my right hon. Friend agree that the lack of effective enforcement is also an important factor in boards’ thinking that the risk may be worth taking? Lack of effective enforcement has been a feature of the last 10 years, as enforcement authorities have been starved of funding and retreated further and further from the frontline, where these practices are going on.”
“Members may wish to stay beyond their speech but should be aware that, in doing so, they might prevent Members in the seats in the Public Gallery from moving to seats in the horseshoe. Again, I do not think that will impinge on our concern this afternoon.”
“I remind Members that there have been some changes to normal practice in order to support the new call list system and to ensure that social distancing can be respected. Members should sanitise their microphones using the cleaning materials provided before they use them, and should dispose of the materials as they leave the room. Members are also asked to respect the one-way system around the room. They should speak only from the horseshoe—although it does not look like that will be a problem for our debate today. Members are not expected to remain for wind-ups. There is less expectation for them to stay for the next two speeches once they have spoken. That is to help to manage attendance in the room.”
“In a pandemic we are only as strong as our weakest link. Is the Minister convinced that, even though we are one of the largest donors, we are doing enough to ensure that developing nations have the infrastructure they need to organise a mass roll-out of the vaccine?”
“Thea worries that, with her gym closed, people are really missing out and being put in danger. Nick, who runs Body Tech in Moreton, asks why we cannot make health and fitness an essential service—not like a blue-light service, but in terms of the role that it plays in physical and mental wellbeing—and protect it more. Will the Minister tell us the scientific basis for the decision to close? Will he admit publicly that we now know more about the disease, and that the prevalence of covid was very low over the summer months, making it much safer, with the process that has been put in place, for gyms to remain open? I hope he will say that, even in tier 3-plus, gyms can look forward to remaining open.”
“She was confined to a wheelchair and on medication before discovering that the disease could be managed by going to the gym. She is now drug-free, wheelchair-free and very fit as a result of the work that she did. She helps clients with the same issue and keeps them out of wheelchairs. When I spoke to her the other day, she told me that some of the people that she helped have been going backwards, because the gym has closed and they cannot get the workout that they need. Thea has clients with mental health problems. One had a history of self-harming, attempted suicide and other mental health conditions. They could not relate to many people, but found that the atmosphere in the gym, the friends they made there, the effort they put in and the support they got there were very good for their mental health.”
“She is also a constituent of mine, although her gym is close to Arrowe Park Hospital, which I believe is in the constituency of my hon. Friend the Member for Birkenhead (Mick Whitley). We all know how important the battle against obesity is if we are to make covid-19 less of a problem, and how important it is for people to have a chance to become fitter, which is guaranteed if you manage to get yourself embroiled in a gym. I want to talk about the mental health benefits of being able to work out, which have been alluded to and are very well known everywhere. Both Nick and Thea Holden, my constituents, would attest to that. There is another aspect: going to the gym can help people to deal with health conditions. Thea, who runs her own gym, suffers from Ehlers-Danlos syndrome, which results in multiple joint dislocations.”
“It is a pleasure to serve under your chairmanship, Mr Mundell, and to follow the right hon. Member for Tunbridge Wells (Greg Clark). I will concentrate particularly on gyms, rather than making general comments on sport, although I support all those we have heard. Also, I congratulate my hon. Friend the Member for Newcastle upon Tyne North (Catherine McKinnell), who, before she even stood up to speak, had persuaded the Prime Minister to do what she asked him to do in this debate. [ Laughter. ] Nevertheless, we need to hear a bit more detail from the Minister, given the arbitrary nature of some of what has gone on in the last year, particularly with respect to gyms. I will mention Nick Whitcombe, who owns and runs Body Tech Fitness in Moreton and who is a constituent of mine, and Thea Holden, who runs EmpoweredFIT.”
“Q You said something astonishing today. You said that, in your opinion, we have outsourced our enforcement on economic crime to the US. Dr Hawley: That is not my wording; I think that one of the business press has used that phrase. Do you want me to explain why I think that?”
“Q I was just getting you to reaffirm that is what you meant: that essentially that is what we have done, because presumably you think that our enforcement and activity against this kind of economic crime is much inferior to what is going on in the US? Dr Hawley: I am afraid it is widely held consensus that what we do here is significantly inferior to what happens in the US, and I do not think there can be any doubt about that. I could share some research we did in 2019, which very specifically compared only London and New York banks, so that we did not get an unfair comparison because of the much larger size of the US. The level of fines that the US imposes, both criminally and on a regulatory level—that is, the money laundering space—is 22 times higher.”
“Q It would be very useful if you would share that information. What can we do to improve the incentives to prevent this activity? Is that more about enforcement and the almost wiping out of action fraud and much of the criminal work that goes on to prevent fraud, which—let’s face it—has fallen off a cliff in terms of its success rates? You have made some very interesting points about how you think the law should be changed, but is that about the law or is this an enforcement problem? Do you think the FCA is fit for purpose when it comes to the enforcement for which it is responsible? Dr Hawley: The law is certainly an issue with fraud, money laundering and false accounting.”